We all know that we support the goals of the Paris Agreement. We are running out of time and it is such a huge challenge. That is why we think it is wrong for a company if we do not lead the way in this.
Have you seen the effects of climate change on the business?
That is clearly a headwind and a risk. It’s something that we monitor very closely on the supply chain side because we have such high quality ingredients. So I think the impact of climate change on crops and harvests is definitely a threat right around the corner. This will unfold in ways that one cannot imagine.
How is the company adapting to the tight labor market?
The war for talent is turning into a major headwind and a challenge for the industry. But I think there’s a structural element to it as you go along, especially in the restaurant space. It will become increasingly difficult to recruit high-quality leaders into the restaurant business given other options people are looking at, such as the gig economy or becoming an entrepreneur. People re-evaluate and ask, “How do I want to spend my life and how do I want to appear?”
We have invested heavily in capacity building and training and in retention and recognition. But the bigger challenge in the longer term is: how do you attract more people to the restaurant sector? And how does Panera become the number 1 employer par excellence?
Do supply chain disruptions impact the business?
There is certainly a huge disruption on the supply side. There is no doubt about it. And that in turn leads to inflation and everything else. We have many strategic suppliers who work for us, and the long-term nature of our contracts has allowed us to cope remarkably well with supply chain shortages during the pandemic, except for items like packaging, which are very, very erratic. Also, our sourcing is assumed to be entirely within the US, so there is less volatility in terms of global disruptions. So I’m pretty confident that if the supply chain gets back to normal, we’ll see some easing of the inflation component.
What about regular wages? Some starting salaries for your entry-level workers are still close to minimum wage.
For our frontline workers, our philosophy is to outperform the local competition. So whatever the local competitive environment, we want to be better than what’s out there, and compete on that basis. But we will differentiate ourselves with our culture, our growth opportunities and our education. Because it is not limited to a financial transaction. It’s more than that. It’s how you’re treated, how you’re respected, how you grow, what the brand stands for, things like the impact agenda. People want to work for companies that stand for something and have meaning.
